A $25.3 million hotel, apartment and retail proposal for downtown Niagara Falls likely won’t get a needed approval from city lawmakers on Monday.
City Council Chairman Glenn A. Choolokian on Friday said the Council’s three-member majority is looking to table an agreement to transfer the city-owned parcel at 310 Rainbow Blvd. to the Hamister Group.
The Williamsville-based hotel and health care management firm wants to build a five-story project that would consist of a 100-room hotel, 24 apartments and up to 8,000 square feet of ground-level retail space.
Choolokian said he believes the proposed $100,000 sale price for the parcel is too low, the Council has not been kept up to date on the proposal and the Council has never been told about the other proposals the state received for the property.
“It’s just too shady for me, too shaky,” Choolokian said.
USA Niagara Development Corp., the state’s economic development agency in Niagara Falls, issued a request for proposals for the site, which was used for a seasonal helium balloon ride through 2007.
The development request came as part of the development of Niagara County Community College’s Culinary Arts Institute in part of the former Rainbow Centre mall.
The land at 310 Rainbow Blvd. had been owned by Cordish Co., which also owned the former Rainbow Centre. It was donated to the Niagara County Community College Foundation by Cordish as a part of development of the college’s Culinary Arts Institute.
In December 2010, the land was deeded from the foundation to the city. In February 2012, city lawmakers agreed to name the Hamister Group as the site’s preferred developer.
At the time, officials said it would take three to four months to negotiate a development agreement.
The framework for a proposed development agreement will be taken up Monday by USA Niagara’s board of directors.
Corporation Counsel Craig Johnson, who reports to both the mayor and the Council, represented the city during USA Niagara’s procurement process, said Mayor Paul A. Dyster. At the time the request for proposals was being developed, the city was strapped for cash because of the dispute between the state and the Seneca Nation of Indians over the sharing of slot machine revenue, Dyster said.
The city was looking to contribute to the deal without having to commit any cash, so city officials agreed to provide the land, Dyster said.
Under the original agreement, the city was not going to receive any money for the parcel, Dyster said, but stands now to get $100,000 for it.
“No one raised any issues back in 2012,” the mayor said.
In a written statement, USA Niagara spokeswoman Laura Magee said state officials “respectfully encourage” the Council to deliver its part of the transaction.
“The city has been well aware since it unanimously approved Hamister as the preferred developer of 310 Rainbow in February 2012 that its contribution to this $25 million project would be the land parcel,” Magee said. “USA Niagara, at that time, committed to fully funding grant incentives needed for the project to go forward and continues to be prepared to do so, subject to our board’s approval.”
On June 26, the City Planning Board recommended that the City Council transfer the land for the project. The parcel had been targeted in 2009 as a location for a carousel.
The Hamister Group in March began demolition and abatement work for a mixed-use project in the Tishman Building on Lafayette Square in Buffalo.